Lighting manufacturer confirms sales increases in automotive sector driving growth

Demand for driving assistance systems from HELLA increasing

Lighting manufacturer confirms sales increases in automotive sector driving growth

HELLA, a global automotive supplier, has concluded the first nine months of its fiscal year 2018/2019 (1 June 2018 to 28 February 2019) with a growth in sales and earnings, boosted by strong automotive sales.

The currency and portfolio adjusted sales rose by 6.2 per cent in the reporting period.

Considering exchange rate effects and the divestment of the wholesale distribution business, the reported sales increased by 0.8 per cent to €5.2 billion (previous year: €5.1 billion).

The adjusted earnings before interest and taxes (EBIT) increased during the first nine months by 5.6 per cent to €417 million (previous year: €395 million).

The adjusted EBIT margin is 8.1 per cent and is therefore approximately at the previous year’s level (previous year: 8.2 per cent).

The reported EBIT increased significantly in light of the divestment of the wholesale distribution business to €649 million (previous year: €404 million).

The reported EBIT margin therefore increases to 12.6 per cent (previous year: 7.9 per cent).

“As expected, the headwind from the market continued to strengthen against us in the third quarter. Nevertheless, we remain on course overall”, said HELLA CEO Dr. Rolf Breidenbach.

“The market environment, however, will remain challenging.

“We are assuming that the industry development will continue to decline, and that material and personnel costs will increase.

“Thanks to our stable, broad-based business model and consistent cost management, we have nonetheless been able to compensate for these challenges so far.”

Sales growth in the automotive segment

The automotive segment in particular has contributed to group-wide sales growth in the first nine months of the current fiscal year.

Sales in this segment have increased by 7.5 per cent to €4.2 billion (previous year: €3.9 billion).

The continued high demand for lighting systems and electronics solutions – mainly in the driver assistance systems and energy management areas – were pivotal to this, according to HELLA.

The adjusted EBIT of the segment increased in the reporting period by just 2.3 per cent to €336 million (previous year: €328 million) due to increased expenses for research and development; the resulting adjusted EBIT margin is therefore 7.9 per cent (previous year: 8.3 per cent).

Strong workshop equipment business

In the aftermarket segment, without taking the divested wholesale distribution business activities into account, sales increased by 3.8 per cent to €492 million (previous year: €474 million) in the nine-month period.

The workshop equipment business, with sophisticated products such as emissions testing devices and beamsetters, was a significant contributor to the sales growth.

The adjusted EBIT of the segment increased to €41 million (previous year: €38 million) in the nine-month period as a result of product mix effects. The adjusted EBIT margin has thus increased to 8.4 per cent (previous year: 8.0 per cent).

In the Special Applications segment, the business for agricultural machinery, construction vehicles and trailers has developed successfully in the first nine months.

However, the reported sales of the segment declined by a total of 5.4 per cent to €298 million (previous year: €314 million), as a result of the closing of the production site in Australia.

In contrast, the profitability of the segment has improved.

The EBIT increased by 15.5 per cent to €37 million (previous year: €32 million) in the reporting period; the reported EBIT margin therefore increases to 12.4 per cent (previous year: 10.2 per cent).

From the current perspective, HELLA continues to anticipate a positive business development for the current fiscal year 2018/2019 (1 June 2018 to 31 May 2019) and confirms the previous company outlook.

“Even though the fourth quarter will be very challenging for us, we are confirming our company outlook for the full fiscal year due to the good business performance in the first nine months,” said Dr. Rolf Breidenbach.

Despite the further weakening of the market environment in the second half of the fiscal year, HELLA continues to proceed on the assumption that the currency and portfolio adjusted sales growth will be at the lower end of the given forecast range of 5 to 10 per cent.

The increase in adjusted EBIT, adjusted for restructuring measures and portfolio effects, will be in the lower half of this range.

With regard to the EBIT margin adjusted for restructuring measures and portfolio effects, an adjusted EBIT margin approximately equivalent to the value of the previous year is still expected.

Find out more about HELLA, its products and developments for ADAS by clicking ‘more details’ below.

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